On Onions, Gods, and Mars

The majority of citizens are fully in denial of everything that matters.

Their leaders, who are also in denial of everything, except what they need to do to get re-elected, recently passed tax cuts.

David Stockman, a smart guy only partially in denial, here explains that the tax cuts are actually a dangerous and unsustainable debt increase.

Now we need another person, with less denial, to explain that the debt increase is actually a predictable outcome of falling per capita net energy.

And then we need another person, with even less denial, to explain that falling per capita net energy is actually a symptom of human overshoot.

And then we need another person, with very little denial, to explain the severity of human overshoot and how our actions and inactions are actually making the future much much worse than it needs to be.

And then we need another person, with no denial, to explain the need for immediate and aggressive population reduction, austerity, and conservation policies.

And then finally, we need the majority of citizens to agree.

What do we get instead?

The religious among us get many gods that promise eternal paradise in the afterlife if they reject all the other false gods and breed like rabbits.

And the secular among us get Elon Musk promising salvation and eternal economic growth with solar panels and electric cars, or if all else fails, an escape to Mars.

Our larger point is that the GOP tax bill will put the Federal deficit in the $1 trillion pluscategory beginning in FY 2019, as we shall demonstrate in Part 2. And it will remain in that zone through the middle of the next decade waiting for two more giant, red-ink spewing shoes to drop.

To wit, the new Fiscal Cliff being structured into the GOP tax bill will arrive in 2025, while the next recession is virtually certain to arrive considerably before that date. It would be the height of folly, in fact, to otherwise bet on the prospect that the US economy will go upwards of 200 months without a recession and the resulting plunge in Federal receipts.

Stated differently, in the name of imaginary growth—which will not happen from the $1.8 trillion of business cuts as we will also elaborate in Part 2—the GOP is driving straight toward a fiscal calamity.

You would think they might sense that already—since it appears the best they can agree to on Friday’s CR expiration and threatened government shutdown is a only a two-week extension.

And perhaps they have also noted that November clocked in as month #101 in the current expansion, making it the third longest in US history and not far behind the 118 month expansion of the 1990s under far more beneficent circumstances.

We mention this because as of November 30, the net Federal debt was up by $880 billionfrom just one year ago!

That’s right. At what the Fed alleges to be “full employment” and what we believe to be a business cycle that is exceedingly weak and long-in-the-tooth, the Federal government’s fiscal posture has deteriorated so badly that borrowing is already approaching the $1 trillionannual level.

Yet now the GOP is on the cusp of opening up a new torrent of red ink for tax cuts, defense spending and much else.

Brilliant post, Rob. As depressing as this is, I really liked how you peeled back the layers of denial.

If you’re up for it, I’d appreciate the opportunity to speak with you about the overshoot UN treaty initiative I’m spearheading. It’s building up support nicely and would certainly benefit from your (at least close to) denial-free feedback.

“The GOP’s delusional theory that the $1.8 trillion of business tax cuts (corporate and pass-thrus) in the Senate bill will pay for themselves in higher investment, growth, jobs, wages and revenue reflows is about as realistic as the Bitcoin Mania.

And as we will explain below, they both stem from a common deformation: Namely, a debt and speculation-ridden financial system which has been completely falsified, corrupted and disabled by the Fed and other central bankers.”

The tax cuts are in reality a backdoor QE intended to keep the ponzi going a little longer. Here is the logic:
– Central banks are stopping QE and raising rates because if they don’t they will have no power in the next crash, which they know is coming.
– Trump’s claim that tax cuts will stimulate investment and jobs is untrue because with 0% credit available there is no impediment to investment other than limits to growth, like broke customers.
– Companies will use the tax cuts to continue juicing their stock prices via buy-backs etc.
– Without this flow of new money to support the bubble, asset prices will collapse, and with them the facade that’s keeping industrial civilization going.

The layers of denial run deep in the human experience, and history shows that until a critical inflection point is reached which forces the issue, the default behavior is “business as usual”.

The tax cuts indeed are a joke, and will only benefit the elites, as there’s no doubt the forces of peak energy and overshoot will continue the downward trends. It’s scary to think of the path the future takes as critical inflection points are reached. The sad reality is that the information age provides the mechanism for learning from past mistakes and realizing how close we are to limits, but is only understood by a fraction of us not in denial, or complete denial.

As for the financial picture, I’m dubious of predictions using the logic of cause and effect that held true in the old economic models. Our economic system of “keeping score” is changing drastically, so measuring the S&P, GDP, effects of QE, debt levels – are all, well, relative. How the next crash plays out could come in new and unexpected ways – but a global currency, martial law, war, debt jubilee, hyper-inflation, confiscation of retirement accounts, black markets, civil unrest, etc., are all possible. The admirable goals of reducing population, austerity and conservation are not as likely, though there does seem to be a slight uptick in awareness – perhaps that’s just the sense of the impending storm creating a desire to hunker down.

Just ran across this site – and I’ll review the videos as time permits. Looks like some good info here….

Currently Reading

Favorite Quotes

For explaining why humans are odd
To Varki and Brower we applaud
A great mystery they solved
With denial we evolved
And created the Higgs, overshoot, and God

Denial not only makes us believe in god, it is god, because denial created us, and denial may destroy us.

The human brain, the God it believes in, and the overshoot it enabled and denies, all resulted from the same improbable genetic adaptation that occurred about 100,000 years ago.

Denial is the reality that must be most aggressively denied to avoid collapsing the house of cards that keeps us functioning.

The most amazing thing about human overshoot is that we do not discuss it.

You know you are in trouble when reduced CO2 emissions from an economic collapse caused by low-cost oil depletion is not sufficient to prevent civilization collapse from climate change caused by previously emitted CO2.

Our only choices are do we want to fall from a higher elevation later, or climb down from a lower elevation sooner?

Things that can’t continue usually stop too late.

Truth is like poetry and most people hate poetry.

All 8 billion of us owe our existence to a six-inch layer of topsoil and the fact it rains; 6 billion of us also owe our existence to nitrogen fertilizer created from natural gas by Haber-Bosch factories.

While it digs its own grave, all the mind can do is entertain fantasies and create excuses.

When the only paying job in town is sawing off the branch which you are sitting on, you….saw away! You might refuse to saw and hang yourself from that branch, but the end is the same anyway, and that option is much less fun. (Cynic @Megacancer)

It is remarkable that a brain emerged from a cloud of hydrogen and figured out the laws of physics that governed, and possibly made inevitable, its own creation and destruction.

We have met the oblivious and they are us.

All 8 billion of us originated from one small tribe in Africa about 100,000 years ago that gave birth to a child with an improbable mutation for a more powerful brain that denied reality. The other tribes were soon toast and we took over the planet. We’re all close cousins. I love you all. Except the deniers.

Meaning comes from understanding why we can understand there is no meaning.

Way too many smart people with big reputations are wrong about everything that matters. Something’s gonna happen that gives them an excuse not to have to admit they were in denial.

One of the most, if not the most, precious and rare things in the universe is the human brain. We have a cosmic obligation to use it and to confirm it works.

Fire to cooking to intelligence to denial to god to plotting to capital punishment to self-domestication to Apollo 11 to 7 billion too many.